Managing integrated solutions

The previous chapters derived the single components of service integration faced by project management organisations and the requirements for capability allocation. Bringing these components together offers insight into the linkages and hence creates an understanding of interdependencies and reinforcements of the different elements. This chapter will focus on the holistic picture and derive the basis for the following analysis.

Service integrators create value by understanding customer’s needs and business activities.

As one can understand from the theoretical aspects covered above, successful service integration is challenging at a strategical level and even more so on an operative level. A company’s strategy must be in alignment with the project choice and its execution. Choosing projects refers to choosing strategic partnerships, upon which the company’s overall direction is built, and tight collaborative work which brings its own challenges. The execution, done by strategic project management, is often challenged by its complexity and interdependence.

Strategic project management should acknowledge project unique context and its

complexity-related requirements to generate value, yet align to that while at the same time ensure congruency with the corporate strategy. To complete the circle, activities are heavily influenced by the skills and knowledge of individuals that are to be connected by an adequate project setting (Figure 7).

Integrated solutions are built in collaboration and upon on value added mechanisms where phases overlap, and value is often hard to be measured or to be defined. Moreover, value delivery does not stop at the handover, but expands over the solutions lifecycle (Davies 2004:

733). At its base lies successful collaboration as derived when looking at relational governance. Actors engage in interdepended activities and together generate a system that generates value. Each actor is specialised in its field and influences and contributes to the overall system with knowledge, specific skills and resources. A system integrator is thus embedded in a network of meaningful relationships and partnerships, aiming to create “a dynamic fit between competencies and customers” (Windahl & Lakemond 2006: 809.).

Building, maintaining and stabilizing relationships is a vital part for complex projects on the individual as well as on the cooperate level. Managing them means assigning resources and attention towards them, responding, initiating and managing their effects. It also includes influencing and being influenced, strategizing, planning and adapting. Due to the great value and higher complexity of capital goods or complex projects, business relations also tend to

Figure 7. The components influencing strategy implementation for integrated solution providers.

be long-term oriented since services expand to after-sales periods (Davies 2004: 734).

Suitable partners are moreover often hard to find as they require specific expertise and willingness to cooperate. They have to be trustworthy, as the delicate processes of information sharing is risky and business partners thus have to be chosen carefully. The partners not only share knowledge in order to provide integrated solutions, but also risks, rewards, and business opportunities. Properly managed relationships can therefore even result in a source of competitive advantage. Collaborations are henceforth built to last and to generate value and profit. Yet the benefits of collaborations must also be captured.

Within complex and changing environments where long term planning is challenging, the network can become the crucial element to circuit challenges. External factors, of which a focal firm is not in control of, might influence a solution and early identification of these factors with the help of its established network, can prevent risks and even open new opportunities. Dialogue, priority adjustments and close proximity are therefore some of the key factors that define successful collaboration and service integration. One should keep in mind that solutions are derived over the whole supply chain and therefore incorporates the upstream relationships with suppliers as well as the downstream relationship with the end customer. Bastl et al. (2012: 666) found that improving down- as well as upstream relationships are crucial for successful solution integration. They conclude end customer involvement as being a success factor for industrial service development. These findings are supported by further studies from Matthyssens and Vandenbempt, 1998 and Olivia &

Kallenberg 2003. Consistency in developing cooperative norms generates and enables technological dependence and eventually creates value. Especially in innovative or strategical projects where uncertainty is high, cooperative norm can enhance cooperation (Windahl and Lakemond 2006: 808-809). Maintaining close relationships can also lead to cost savings. The lack of relationship relates to lacking information regarding the customers’

needs and internal processes and hence disturbances in the process of developing and creating (2006: 812, 815; Bastl et al. 2012: 668). The study from Windahl and Lakemond from 2006 examined relationships within solution providers and identified them as unlike relationships

within product providers, which was supported by the research of Bastl et al. (2012: 666).

Windhal and Lakemond (2006: 817) define several relationship factors as important:

o the strength of relationship between actors o firms position within a network

o the solution’s impact on existing internal activities and on the customers core processes external determinants

Relationships are therefore the binding elements across teams and organisations. They build the relational governance needed for complex projects and allow for exchange of crucial skills and successful project management. Project governance thus goes beyond frameworks and tools. It connects teams, provides a framework for shared activities and enables optimal conditions in complex and technically challenging projects, building the overarching frame of a firm’s presence infrastructure.

Relational practises are henceforth not enforced by contracts or standards, but are emerging in a flexible, collective manner and are enabled by a collaborative environment within the network. Some of the practices identified by Chakkol et al. (2018: 1001, 1011-1012) are listed as follows in Table 1 and structured into their related areas. This list only includes the practises that can be connected to this thesis focus and concepts introduced previously. There are naturally various other practices existing, depending on the project. These practices aim to create a flexible work environment which, despite standardised processes, allows for relational oriented practices and hence for collaboration. The practices are naturally context dependent but overall focus on creating contact and trust between the different parties.

Table 1. Relational practices for collaboration (adapted from Chakkol et al. 2018: 1012).

Heide and Miner (1992: 285) support these when stating that frequent contact can enhance a pattern of cooperative behaviour. Van Marrewijk (2004: 240) finds reasons for alliance failure to be lack of mutual trust, commitment and cultural sensitivity. Trust, commitment or knowledge-sharing are some of the most important socially derived mechanisms in relational patterned governance identified by Chakkol et al. (2018: 1000). They further point out that

“a strategic intention to collaborate through standardised contractual processes translates into a flexible work environment that allows for the emerge of relational practices for collaboration” (Chakkol et al. 2018: 1011.). It can thus be said that basis for successful collaboration is thus a strong relational governance where project members can create a common macro culture to exchange skills, build trust and routines that allow for changes.

A collaboration itself aims to supply the customer with a tailored solution rather than a product. Hence customer centric, rather than product centric thinking has to be applied, which translates into collectively seeing the solution through the customers eyes. System integrators become part of the customers’ operations, therefore also means understanding the customer, and in a larger sense also the customers activities. Matching business competences consequently refers to actors simultaneously aligning their goals and hence adjusting their overall strategies to form partnerships, align in their understanding of creating value and align

their activities efficiently and effectively (Davies 2004: 733; Spring & Araujo 2013: 59).

When looking at strategic project success, one can therefore not exclude the solution integrators from its network, up- nor downstream. The network is interconnected on multiple levels and the customer cannot easily be isolated. Presence therefore addresses the customer, to a certain degree the end-customer, as well as suppliers working at the customers side.

Looking at the literature on the role of presence in regard to project success, very limited can be found. Mentioned in the larger context of servitization is the reduction of production facilities when focusing towards service, yet this is not the infrastructure this thesis is addressing. Collaboration between different nationalities is a widely recognized topic, yet there are only limited studies focusing on how local presence affects collaborations. Instead, presence is usually addressed as a form of human resources and the process of hiring an adequate workforce, or supplier networks and training. Table 2 provides an overview of the literature touching on the role of presence of forms of distributing integrated solutions.

Closest related to presence in the form as it is important for this thesis are Baine’s (2009) and Storbacka’s (2011) analysis. Storbacka’s understanding of infrastructure is a set of capabilities and practices to support a business transition into servitization. The overall focus is knowledge exchange. Infrastructure hence refers to the controlled exchange of crucial and extensive information, often by the means of skilled people. To do so, several aspects have been identified: specialized an intelligent people to support the sales team with market and trend analyses or competitor information, knowledge repositories to gather the generated business knowledge, and relationship and solution delivery management (2011: 708).

Baine’s highlights the shift from manufacturing facilities to smaller facilities located in close proximity to the customer premises to support psychological needs and enhance customer experience (2009: 509). However, none of these factors are investigated in more detail, leaving much room for examining an ideal presence structure of solution providers.

Table 2. Significant research related to presence infrastructure.

With the above described concepts, it is now clear that to understand the role of presence, one has to understand the role of resources and project collaboration across actors. While project governance offers the contractual and relational framework for complex projects, and the structure to operate in, the actual meaning of presence infrastructure lies within the role of a firm’s resources and capabilities.